Along comes Metro, upping realty prices

Along comes Metro, upping realty prices

Much like its predecessors, the new stretch of the Metro Rail connecting Peenya Industrial Area and Nagasandra will boost realty prices in the area, learns Ruth Dsouza Prabhu

The public in Bengaluru had something to cheer about when yet another stretch of the Metro was thrown open for commercial use last month.

Karnataka Chief Minister Siddaramaiah and Union Minister Venkaiah Naidu were part of the ceremony that flagged off the metro train at Reach 3B, between Peenya Industrial Area and Nagasandra. This stretch is part of the Green Line on the North-South Corridor. With this, the second north extension line namely the Reach 3B, covering 2.5 km is now complete.

Naturally, it will be a while before the complete impact of the new stretch is felt by the public. However, as did with the earlier stretches, the Reach 3B is bound to influence real estate prices in the region to a large extent.

As the Namma Metro line closes in on reaching its full potential of hassle-free and quick long-distance commute, real estate prices will continue to appreciate. As a result, localities surrounding the Metro will witness more premium developments across price segments, whether commercial (office/retail) or residential, believes Suresh Hari, secretary, CREDAI Bengaluru. 

Take a look at what recent developments tell us – with the Baiyyappanahalli-MG Road stretch, the first segment of the first phase of Namma Metro, areas along the stretch witnessed a significant rise in prices. The result was the same when Reach 3 and Reach 3A of the North Line, connecting Sampige Road to Yeshwantpur and Yeshwantpur to Peenya Industrial Estate respectively, began as well.

Suresh says, “Residential property within the current extent of the Metro has risen by about 20-25 per cent in the 2011-14 period. Rentals have gone up by about 50 per cent for residential property and 40-50 per cent for commercial property.”

Improved connectivity

One of the key benefits to the opening of the Metro Rail and its related stretches is the fact that it makes even far-flung places accessible. Connectivity is improved between the CBD area and the outskirts, reducing commute time and opening up newer possibilities for real estate development. 

Om Ahuja, CEO - residential, Brigade Group, opines that some of the areas along and near the Metro stretch, especially Dasarahalli and Nagasandra, will now see improved and quicker connectivity to the city. He says, “Along the entire Metro Phase 1, we expect areas around Kanakapura Road and Mysore Road - so far two dark horses in terms of growth and capital appreciation in real estate - to improve. We expect over 25 per cent growth in capital values in these specific zones in the next 12-18 months.”

“Along the North line specifically, we will see Yeshwantpur gain the most. With the Peenya Industrial Estate and Nagasandra stretch opening, those commuting to/from Peenya will experience smooth and quick commutes. This will impact the capital values of the nearby areas by about 15-20 per cent,” he adds.

Boosting the pricesOm explains that two zones will benefit with the Metro alignment – the first, areas that are currently at a distance will now get closer and see a price rise of  20 to 50 per cent in the capital values. Such enhanced connectivity improves lifestyle as has been witnessed in cities like NCR and Mumbai. “Secondly, for areas that are congested within the city and where the price appreciation has stagnated currently, the connectivity brought in by the Metro will be of immense benefit,” he maintains.

Suresh observes that with the Peenya-Nagasandra stretch becoming operational, there will be a price increase of 10-15 per cent across developments on the stretch over the next six to twelve months. The Yeshwantpur-Nagasandra corridor has seen quite a few new developments coming up or completed in the past two years. There are several projects in the pipeline in this corridor. Hence, this is the best time for prospective buyers looking at these localities to invest.

He goes on to say that this phenomenon is especially true of Yeshwantpur, which is seeing a huge potential as a real estate micromarket. The price band for Yeshwantpur, which is around Rs 6,000-Rs 8,000 per sq ft now, has the potential to go up to Rs 7,000-Rs 10,000 per sq ft in the next one year. The Yeshwantpur-Nagasandra stretch will see more growth as many projects are also being launched now.

The new stretch of the Metro has just begun and we are yet to see the complete impact of its presence. But as industry observers point out, it is always a turn towards profitability. 

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